Judgment debt: A-G affirms GH¢10 trillion savings
The Attorney-General and Minister of Justice, Godfred Yeboah Dame, has affirmed President Nana Addo Dankwa Akufo-Addo’s revelations that the government has saved the country GH¢10 trillion in judgment debt.
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According to Mr Dame, the President was even magnanimous with his assertion as evidence on record, including court rulings, clearly showed that the money saved to the state in judgment debts during his tenure as Attorney-General (A-G) was in excess of GH¢14 trillion.
“The GH¢10 trillion is an understatement.
We have done more savings.
The proper reckoning of how much has been saved actually shows that this government has saved the state more about GH¢14 trillion in judgment debts since 2020,” he said during a media interaction yesterday.
During the interaction, the A-G presented court documents showing various judgment debts against the state which had either been set aside by the courts or thrown out by arbitration tribunals following legal actions by his outfit.
In other cases, the execution of such claims had been halted by the courts pending the determination of legal actions from the A-G challenging the legality of such claims.
GH¢10tn claim
One of the cases revealed by the A-G was a GH¢10 trillion judgment debt (specifically GH¢10,331,841,859,411.20) by African Automobile Company Limited against the then Ministry of Employment and Manpower and the A-G.
The said judgment arose out of a contract for the provision of automobile services rendered by the African Automobile Company Ltd to the government of Ghana in 1996.
The High Court entered judgment in favour of the company as far back as in 2009, with the judgment debt around 1.12m old cedis (GH¢112) which was upheld by the Court of Appeal in 2011.
However, as of 2021, that judgment debt had ballooned astronomically to GH¢10 trillion.
“When we got notice of this, we immediately filed processes to have the payment of the sum set aside on the basis of fraud.
A writ has been issued in the High Court. The court has also granted the application suspending the execution of the judgment,” he said.
A-G’s challenge
In the suit alleging fraud and challenging the basis of the GH¢10 trillion judgment debt, the A-G is of the contention that the High Court awarded the judgment debt of GH¢112 and rejected claims by the company that a credit facility relating to the contract included a 10 per cent compound interest upon default.
However, the A-G accused the judgment creditor (African Automobile) of misinforming the Court of Appeal that the credit facility included the said 10 per cent compound interest, which was totally false.
“That the defendant knowingly, and with intent to deceive the Plaintiff, misled the Court of Appeal to apply the terms of the purported credit facility retroactively to cover debt of GH¢14.93 under an oral contract dating back to 1996,” the A-G averred in its suit.
SONA
During the State of the Nation Address (SONA) last Tuesday, President Akufo-Addo lauded the A-G for working efficiently and in an effective manner to save the state GH¢10 trillion in judgment debts.
"The Attorney-General has continued, in a very effective manner, the tradition under this administration of contesting every civil litigation against the state and has avoided the numerous judgment debts that used to be given against the state.
The Office, as a result, has saved the country over GH¢10 trillion," the President said.
The claim by the President raised many eyebrows and elicited criticisms, with many people accusing him of exaggerating the figures.
Some were of the view that the whole economy of the country was not even up to GH¢10 trillion for the government to have claimed to have saved that money.
However, the A-G said the fact that the country did not have such money in its coffers was not a basis for people not to make huge claims against it.
“People do not enquire about a person, entity or country’s financial status before making monetary claims against them.
The savings is actually in respect of claims fought off successfully or what the government stands a high likelihood of fighting off,” he said.
He stressed that under his watch, the Office of the Attorney-General vigorously contests judgment debts against the state instead of the previous practice where the cases were settled, with huge financial consequences on the purse of the country.
Mr Dame revealed that his outfit had also successfully had some major judgment debts against the state set aside.
They include a GH¢352.62 million and $988.29 million judgment debts by China Julin International Limited against the Ministry of Roads and Transport, which was set aside by the Supreme Court in January 2023 after the A-G challenged the capacity of the plaintiff.
Another was the NDK Financial Services’ GH¢1.2 billion judgment debt claim against the government which was thrown out by the Supreme Court in June 2021 following a legal action by the A-G.
The company went to court to compel the government to pay GH¢1.273 billion it claimed was outstanding balance and interests on a judgment debt.
Instead, the financial services company was awarded GH¢14,699.74 with interest by the Supreme Court after the A-G had challenged the validity of its claims.
The said judgment debt was in relation to a credit facility provided by NDK between 2005 and 2008 for Ahaman Enterprises Limited for the latter to handle some electrical poles and other electric materials on behalf of the Ministry of Energy.
Arbitration
In terms of international arbitration, the A-G revealed in February last year that the Permanent Court of Arbitration (PCA) in The Hague, The Netherlands, dismissed a $55 million judgment debt against Ghana which was being sought by a Chinese company over a traffic management project.
The disputed project — the Accra Intelligent Traffic Management System (AITMS) — was signed between the Government of Ghana (GoG) and Beijing Everyway Traffic & Lighting Technical Company Limited (simply known as Everyway Tech) in 2012.
In a unanimous decision last year, a three-member panel of the PCA dismissed Everyway Tech’s claim on the basis that the tribunal had no jurisdiction over the legality of the alleged expropriation of the company’s investment by the GoG.
It was the view of the arbitral tribunal that although the China-Ghana BIT allowed investor-state arbitrations to settle disputes, such arbitrations did not include the issue of legality of expropriation.
